On 30 June 2021, the PRA and FCA jointly published Policy Statement 14/21: Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251 (PS14/21).
In PS14/21 the PRA and FCA provide feedback on the responses to Consultation Paper 6/21: Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251 (CP6/21). It also contains the PRA’s and FCA’s final policy, in the form of amendments to Binding Technical Standard (BTS) 2016/2251.
In CP6/21, the PRA and FCA proposed to:
- Change the implementation dates and thresholds for the phase-in of initial margin requirements.
- Require the exchange of variation margin for physically settled foreign exchange forwards and swaps for specified counterparties only.
- Extend the temporary exemption from the margin requirements for single-stock equity options and index options until 4 January 2024.
In PS14/21 the PRA and FCA report that the responses to CP6/21 were generally supportive of the proposals.
In response to the comments received, the PRA and FCA have made a change to the transitional provision to extend the eligibility of European Economic Area (EEA) Undertakings for the Collective Investment in Transferable Securities (UCITS) as eligible collateral. The specific change, and rationale, are set out in Chapter 2 of PS14/21.
The requirements became effective on publication of PS14/21, which includes the final technical standards instrument by the PRA and FCA.
